By Angie Chang (Co-Founder & Editor-in-Chief, Women 2.0) Sue Khim is founder and CEO of Alltuition, a startup that empowers students and their families to navigate the financial aid process. She developed the concept for Alltuiton when she was a junior at the University of Chicago with $50,000 of undergraduate debt. With her co-founders Sam Solomon and Silas Hundt, together they have built out a powerful platform of college finance tools.
Alltuition brings every step of financial aid into one easy interface, like a TurboTax for college. Students, parents, and grads can fill out forms, manage deadlines, compare loans, and more.
Alltuition was founded in 2009 and is based in Chicago, where it has raised a Series A round and grown to a full-time staff of nine. Formerly EduLender, the company recently changed their name to reflect their promise to change the whole financial aid process from start to finish.
Women 2.0 Editor-in-Chief Angie Chang talks to Alltuition's Sue Khim about starting up in Chicago:
Women 2.0: How did you start solving the issue of student loans with technology? Sue Khim: I was a junior in college and personally had a lot of loans. My brother was starting to go to college and was taking out a lot of loans too. I thought I was going to medical school and we had no cash to pay out of pocket, so I was looking for loans and trying to figure out what I was going to use next year to finish school. I saw that loans had become a lot more expensive than I remembered, and my research in 2008 showed that the markets had slowed a lot. Banks were rapidly exiting, there were fewer lenders... so then I thought aren't there any lenders doing it cheaper than the 9.5 and 10.5% rates I was seeing? I did find them but they were very few and far between.
It's extremely hard to find a lender that's both cheap and that you qualify for -- you can find loans more like 6.5%, but it takes a while to realize that these even exist. The biggest brands with the biggest advertising budgets get the most eyeballs, whereas these small credit unions are not for profit with not-huge budgets doing great loans for people to pay for school. The only places online that supposedly did loan search are actually advertising sites for banks just showing consumers their best advertising. Once again, showing off the most expensive loans for students.
Women 2.0: And Alltuition was born! How did it change once it got off the drawing board? Sue Khim: Originally I wanted to do this as a not-for-profit, I knew I could program the site myself and make a little bit of profit myself. I wanted to raise $100k for myself and another person to work on the Alltuition idea. The pitch is that all college students need this -- loan rates are better and they will pay debt off faster. This is a good thing, a useful thing.
Unfortunately, foreclosures were a big problem so college debt was not as big of a problem as people losing their homes. I knocked on all the foundation doors and nobody listened. I don't think it was clear how big of a difference for someone with $50k to save 5% interest every year. I started entering business plan competitions and I found a partner who was interested in the business.
Excelerate Labs is the Y-Combinator or TechStars in Chicago, and we got into Excelerate which is when we really started moving. We built the first search engine in Excelerate and at the end of the year we raised a major round of fundraising. We've been building features since then, like you can graphically see your loans and have compare loan details, etc. We just make it really easy.
That took a long time to do but we're finished and we're really proud of it.
For your birthday, you can have a gift registry for your birthday for a laptop -- an online campaign to help students pay for study abroad or a laptop needed for homework and school. An easy way to create a page for themselves, hook it up to a PayPal account, and accept donations to help you pay for a goal you really want to help you finish college. Go to "Community" in the footer to see the fundraisers there.
Women 2.0: What are the startup lessons you learned from Alltuition? Sue Khim: First, I learned that early-stage startups have to be really scrappy because you're doing something really hard with little money. Your team is important. During Excelerate, we interviewed tons of people for the third co-founder spot. I'd been working on Alltuition solo for a long time, and after that our team was just the three co-founders for a long while. Excelerate brought in hundreds of mentors, and we identified the right ones who helped us strategically and to find capital.
For any startup that is starting up, I highly recommend an accelerator program for the resources, mentorship, and value. Excelerate gave us an environment to work all the time. There were 9 other very, very motivated teams -- they were all very selective companies around with energy and excitement. It gave us an environment that believes that we are building something different, an energized environment, and we could really grind out long hours.
My last piece of advice is to be very, very careful about knowing about validating the product/market fit -- knowing what the customer wants, and to build it usable. You need constant engagement with people who are using your product. I don't read a lot of the startup literature because I'm much more of a doer -- I think first and foremost you should build your product, you should find people to work with you, and you should find real human mentors instead of blogs. I need people invested in me personally.
My recommendation if you are to read any startup literature, Paul Graham influenced me the most and I liked to read what he had to say about startups.
Action first -- and if you have to read anyone, read Paul Graham.
This post was originally posted at The Huffington Post.
Photo credit: Tech Cocktail